Daily News

The Importance of Transformation Strategy

The second day of Loyalty Expo 2019 began with a presentation from Ajit Sivadasan, Vice President and General Manager of Global e-Commerce and Digital Marketing at Lenovo. In his talk, Sivadasan reflected on four decades of strategic evolution for the company. He touched on the need for brands to focus on what he views as the three key concepts of transformation strategy: clarity of thought, leadership commitment, and company culture.

He first noted that Lenovo began as a distributor of computer hardware in 1984, under the name Legend Holdings. Later, the company began to manufacture its own personal computers and became the number one PC brand in China. Next, the company changed its name to Lenovo (a portmanteau of Legend and novo, which means innovation) and acquired the IBM Thinkpad brand and Motorola.

As the company made these changes, its strategies had to change as well. For example, in the beginning, Lenovo was a product-centered brand. However, with the advent of mobile technology and social media, it realized it had to become a customer-centered brand.

Sivadasan said that these kinds of changes require brands to have a transformation strategy in place, since all companies have to be prepared to adapt if they wish to stay solvent. He provided two examples to illustrate this point. The first emphasized the importance of leadership commitment.

When Lenovo acquired IBM and Motorola, the CEO realized that the company needed to have a stronger presence in the West. Since the beginning, Lenovo had been headquartered in China (as it had been started by 11 Chinese scientists). However, the CEO felt that the company would have to move to become a global brand. One part of this strategy was appointing a new, Western CEO. In this way, the original CEO demonstrated leadership commitment to the company by stepping down from his position.

Sivadasan also shared a more personal story to exemplify the necessity of company culture. He recounted phone calls he had made from India (where he is from and where he worked) to Lenovo executives in China. He always came away from these phone calls with the belief that he and his Chinese colleagues had aligned on company goals and what needed to get done.

Unfortunately, he said, months passed, and those goals were never realized. He said that this was because there had been cultural dissonance over the phone. To solve this problem, he traveled to China, spoke with his colleagues directly, and overcame cultural differences. (One of these, Sivadasan said, was the tendency of Indian speakers to speak very quickly, while Chinese speakers tend to speak slowly.)

Just as Sivadasan had to overcome cultural differences, companies have to focus on culture by understanding their customers’ points of view. In other words, they have to empathize with customers, feel what they feel. Only in this way can brands achieve a profitable strategy of making customer-centric decisions, focusing on customer profiles, and understanding how customers view the brand experience.